Mobile money remittances in Africa to reach $33 billion

MOBILE money remittances in sub-Saharan Africa are projected to reach $33 billion in 2015 as the services are growing above 6% in more than three countries with increasing mobile connectivity, WorldRemit has said.WorldRemit is a United Kingdom-based online service company that lets people send money to friends and family in other countries.

Many mobile phone companies in Africa have in the last couple of years entered the financial services sector through launch of mobile money transfer companies — notably Mpesa in Kenya and Ecocash in Zimbabwe. Other local mobile money transfer companies are NetOne’s OneWallet and Telecel’s Textacash.

WorldRemit said there would be stagnation in the sector this year, but strong surge in three big countries would offset the drop.

“Stagnation in remittances to Nigeria was offset by strong growth in Kenya (10,7%), South Africa (7,1%), and Uganda (6,8%). Nigeria, which received $21 billion in 2014, accounts for two-thirds of remittances to the region,” WorldRemit said. It noted that mobile money transfers in the region still remained relatively high as the services grow.

“Fees remain far too high — the average cost of sending $200 to Sub-Saharan Africa remains at 12% (far off the G20’s target of 5%); largely due to the cost of bricks-and-mortar agent networks of traditional firms. There is a huge potential for mobile technology to reduce costs on both the send and receive sides,” it added.

Alix Murphy, senior mobile analyst at WorldRemit said: “Mobile money will play a pivotal role in global remittances, helping to reduce fees, improve speed and convenience for users.”

WorldRemit said worldwide mobile money usage was exploding with 261 mobile money services now live across 89 countries with 103 million active users as of December 2014. More than half of these services currently in operation are in Sub-Saharan Africa.